Food sector needs streamlined regulations to boost exports

There is need for simplification of domestic regulation without compromising on integrity. The related departments brings in new rule every time something happens, it is high time they should sit back and look at the regulations afresh - Rajashekar Reddy, founder, Sresta Natural Bioproducts Pvt Ltd

Hyderabad: City-based Sresta Natural Bioproducts Pvt Ltd, that offers organic food products under the brand 24 Mantra Organic, will be introducing a range of frozen foods in India next year. Right now, these frozen foods are available in its International markets. The brand will be soon launching other varieties of low Glycemic Index rice too.

In the recent domestic launch, the brand brought out organic snacks, and low Glycemic Index rice for managing diabetes. With this the total number of 24 Mantra products available in India is over 150, while internationally the count is more as against that in India. Sresta Natural Bioproducts Pvt Ltd works with 30,000 farmers spread across 12 States growing organic crops on 1.7 lakh acres of land.

Speaking to Bizz Buzz about the challenges the sector faces, S Rajashekar Reddy, Founder and Managing Director, Sresta Natural Bioproducts Pvt Ltd, said: “Last two years have been tough for us due to regulatory changes, both in India and within other countries. In a way its good as it is cleaning up unethical practices. There is need for simplification of domestic regulation without compromising on integrity. The related departments brings in new rule every time something happens, it is high time they should sit back and look at the

regulations afresh.”

24 Mantra Organic enjoys a market share of 30 to 35 per cent. The last two years have been challenging, otherwise the brand is growing at 15 to 20 per cent y-o-y, Reddy shared. Their products have been reaching 15 lakh families in India, and a million abroad. The company is exporting to 40 countries, while their biggest markets are the US and Middle East.

The other pain points, Reddy urges the government to address is withdrawing limit on stock bought, movement regulation, cess of around 1.5 per cent and ban on export of certain grains. “When we source agriculture raw materials from farmers in other States, under the Essential Commodities Act the government imposes stock limit. For a company like ours which buys from contract farmers as and when it is harvested, it becomes an issue. The farmer has produced it according to our specification for which we pay a premium price,” he said. Moreover, due to the regulation on movement of produce, every time the company moves materials from one State to another they have to pay a Cess of around 1.5 per cent. There is also export ban on rice, wheat, and its products. “We are not able to sell our products that we have developed based on the requirements of the international market,” Reddy added.

Coming to trade arrangement of organic products with other countries, Reddy informed that the Organic Equivalency Agreement with the US, lost now, has to be renegotiated. Similar is the issue with the European Union, Reddy said, “APEDA (Agricultural and Processed food products Export Development Authority) or the Commerce ministry has to play their role of trying to build systems to bring down export barrier and build trust to ease exports. APEDA has so far done a good job, now the export market is growing so, we need a regulator who is equipped fully, be it in Commerce or Agriculture ministry. But, one body should be assigned as today too many people are meddling, and also they should be given additional resources.”

One of the early players in the organic sector, Sresta Natural Bioproducts Pvt Ltd took off in 2004 by educating consumers about the benefits of organic produce, and proving to farmers that growing crops without using fertilizer, pesticide is possible. Today, according to Reddy now the task at hand is building trust among the consumer base, expanding consumer base, and making sure what is offered in the market is genuine.